Chief executive Sipho Maseko says Telkom is "changing its diet" with a plan to trim R1 billion from its cost base each year for the next five years. The Employment Equity Act will be followed when job cuts are implemented, he says. Photo: Simphiwe Mbokazi

Telkom has denied that white people would be most affected by a retrenchment plan that is expected to involve 2 600 managers at South Africa’s dominant fixed-line provider.

The JSE-listed company was “changing its diet”, with a plan to trim R1 billion from its cost base each year for the next five years, chief executive Sipho Maseko said yesterday.

As Telkom had not transformed the racial profile of its workforce fast enough, it would have to retrench more than 5 000 white employees to achieve its equity targets, trade union Solidarity said.

Job cuts are part of the group’s plan to tighten its belt, which includes a decision to stop supplying bottled water to staff and reducing the average fuel consumption of vehicles in its fleet.

Telkom’s retrenchment plan ground to a halt this month when Solidarity approached the Labour Court, saying the criteria were racist as they targeted white managers.

According to Solidarity, Telkom did not take enough input from unions regarding its retrenchment plans.

Solidarity met Telkom last Thursday and reached a settlement which was taken to the judge and made an order of the Labour Court.

“Section 189 (termination) letters were issued to all staff. We may have fallen a step short by describing the meetings with stakeholders as workshops instead of consultations.

“We should have been more particular in detail. We need to extend the consultation process and go one step further,” Maseko said.

The agreement came after Solidarity had launched an urgent application for an interdict in the Labour Court to stay the flawed consultation process that Telkom has followed to date. According to Solidarity, in terms of the court order a facilitator must be appointed to facilitate the consultations regarding the proposed retrenchments.

The court prohibited Telkom from making any appointments or carrying out any retrenchments until the facilitation process has been concluded.

Maseko said unions and Telkom management were now working through a facilitated process to “find each other” through the facilitation process.

“Over the next week or two, we hope the process will be completed. Even if it takes a month or two, as long as people can say we did all we could, and we explored employment opportunities and those who have to leave the company do so in a dignified way”.

Charles Nupen, an attorney, is facilitating the process.

The company’s financial results for the 2013 year indicated challenges in the group which reported headline earnings a share of 87c, and a return on equity of 2.1 percent.

The cabinet voted against Telkom’s strategic equity shareholding deal with South Korea’s KT Corporation last year. This resulted in a loss of shareholder confidence and led to a major overhaul of the board.

The shares rose 0.77 percent to close at R49.82 yesterday. - Business Report

Note: The above story has been corrected following initial publication after Telkom said its chief executive Sipho Maseko had denied saying that white staff would be most affected by its retrenchment plan.